How are the Children of Visible Minority Immigrants Doing? An Update Based on the National Household Survey

MPRA Munich Personal RePEc Archive How are the Children of Visible Minority Immigrants Doing? An Update Based on the National Household Survey Grady Patrick Global Economics 11 May 2016 Online at https://mpra.ub.uni-muenchen.de/71707/ MPRA Paper No. 71707, posted 6 June 2016 06:55 UTC

Global Economics How are the Children of Visible Minority Immigrants Doing? An Update Based on the National Household Survey By Patrick Grady Global Economics Working Paper 2016-1 May 11, 2016

Abstract: This paper examines the performance of the children of immigrants (called 2 nd generation immigrants) to Canada using data from the 2011 National Household Survey, which was administered along with the 2011 Census. While concerns have been expressed about the reliability of this survey given its voluntary nature, it is the most recent data available and is of suitable quality for the purpose at hand. As the composition of immigration inflows has shifted after 1980 from the traditional European source countries to the Third World, the analysis in the paper focuses on the labour market performance of 2 nd generation immigrants who belong to visible minorities. This is to determine if the poor labour market performance of first generation visible minority immigrants is having any adverse effects on the educational and labour market outcomes of their children. An encouraging fact revealed by the data is that 2 nd generation visible minority immigrants are becoming more highly educated than both 2 nd generation non-visible minority immigrants and non-immigrants 53.4 per cent of 2 nd generation visible minority between 25 and 44 with employment income had earned university certificates or degrees compared to only 35.4 per cent of non-visible minority 2 nd generation immigrants and 25.2 per cent of non-immigrants in the same age groups. However, the educational attainment among groups varied from the high levels achieved by Asians to the low levels of Latin Americans and Blacks. But, while 2 nd generation visible minority immigrants obtained more education than 2 nd generation non-visible minority immigrants and non-immigrants, their performance as a group did not measure up so well in the labour market. In the 25 to 44 age group 2 nd generation visible minority immigrants earned on average $42,206, which was higher than the $40,431 earned by non-immigrants, but less the $49,202 earned by 2 nd generation non-visible minority immigrants. The labour market performance varies significantly among different visible minority groups. 2 nd generation Chinese immigrants in the 25 to 44 age group actually earned $47,879 and South Asians $46,662. Because of the large number of Chinese and South Asians included as 2 nd generation immigrants, this buoyed up the overall average and masked the unfortunate fact that many other visible minority groups are actually doing much worse than average overall and falling short of non-immigrants. Another troubling fact is that, for any given level of education, 2 nd generation Black and Latin American immigrants earn substantially less than non-immigrants and especially non-visible minority immigrants. The paper provides encouraging evidence that the children of the visible minority, immigrants who are now performing so poorly in Canada s labour market will do much better than their parents and catch up or surpass the earnings of non-immigrant groups, but will have a hard time keeping up with their non-visible minority counterparts. The ii

results, while broadly in line with its predecessor (Grady, 2011), are more encouraging concerning the performance of 2 nd generation visible minority immigrants. JEL Classification Codes: J23 Labour demand; J24 Human Capital; Skills; Occupational Choice; Labour Productivity; J61 Geographic mobility, immigrant workers. Keywords: wages, 2 nd generation immigrants to Canada, immigration policy, human capital iii

Introduction A series of Statistics Canada studies (Picot, 2008; Picot and Sweetman, 2005; Picot and Hou, 2008) has highlighted the poor and deteriorating performance of recent immigrants in labour markets and the resulting growth of poverty among immigrants. The poor performance has been confined largely to visible minority immigrants as non-visible minority immigrants have continued to do relatively well (Grady, 2010). This naturally raises questions about the future labour market performance of the children of these visible minority immigrants, which was examined in an earlier study using data from the 2006 Census (Grady, 2011). This study updates the results of that study using data from the 2011 National Household Survey, which amidst much controversy replaced the long form census (Grady, 2015). While concerns have been expressed about the reliability of this survey given its voluntary nature, it is the most recent data available and, as was argued in Grady and Grubel (2015, pp.4-6) is of suitable quality for the purpose at hand. More specifically, this study examines and compares the average education levels and incomes of three groups of people: 2 nd generation visible minority immigrants (defined as those so classifying themselves in the 2006 Census as both visible minority and children of immigrants), 2 nd generation non-visible minority immigrants (similarly defined as those so classifying themselves), and nonimmigrants (defined as those born in Canada). The Evidence The Public Use Microdata File (PUMF) of the 2011 National Household Survey contains data on the employment statistics by geography, work activity status, generation status, visible minority status, age group, education, and gender. These data are taken from the 30-per-cent Census sample and include the numbers in the groups, and their median employment income and average employment income reported for 2010. The analysis presented here uses the data on average employment income for total work activity including both part-time and full time. For purposes of analysis, it is broken down by gender, educational level, and visible minority group. The Number of 2 nd Generation Immigrants The number of 2 nd generation visible minority immigrants reporting employment income included in the sample was further narrowed for purposes of analysis to those in the 25 to 44 age group. This was done to allow sufficient time for those included in the sample to complete their education and to become established in the labour market, and to make comparisons with non-immigrants more meaningful. It consequently excludes the very small group of 2 nd generation visible minority immigrants in the over 45 to 64 group as they are not representative of the children 1

of the recent increased wave of visible minority immigrants which began in the 1980s. The number of 2 nd generation visible minority immigrants included in the sample is only 8,084 compared to 27,285 non-visible minority 2 nd generation immigrants and 292,974 non-immigrants. This is not yet a very significant proportion of the total (Table 1A, 1B and 1C), which makes any conclusions drawn from their labour market performance still very tentative and preliminary. However, the number should be large enough to at least provide an idea of how the children of visible minority immigrants born in Canada are doing in the labour market. Educational Attainment An encouraging fact revealed by the data is that 2 nd generation visible minority immigrants are becoming more highly educated than both 2 nd generation nonvisible minority immigrants and non-immigrants (Chart 1 and Table 1A, 1B and 1C) 53.4 per cent of 2 nd generation visible minority between 25 and 44 earning employment income had earned university certificates or degrees compared to 35.4 per cent of non-visible minority 2 nd generation immigrants and 25.2 per cent of nonimmigrants in the same age groups (Table 1A). Interestingly, women 2 nd generation immigrants have achieved even higher levels of education than men (Tables 1B and 1C). 2

Moreover, some groups of 2 nd generation visible minority immigrants are getting much more education than others 68.1 per cent of 2 nd generation Korean immigrants between 25 and 44 have a university degree or certificate, 65.3 per cent of Chinese, and 60.9 per cent of South Asians (of which 65.7 per cent for Hindus). This certainly supports the popular perception that Asians excel academically (Table 1A and Chart 2). Again women are outperforming men across all visible minority groups (Tables 1B and 1C). The same holds true for advanced degrees 14.2 per cent of 2 nd generation visible minority between 25 and 44 earning employment had earned university certificates, diplomas or degrees above the bachelor s compared to 10.7 per cent of non-visible minority 2 nd generation immigrants and 6.7 per cent of non-immigrants in the same age groups. Again the educational attainment of some groups stands out 22.3 per cent of Koreans in the 25-to-44 age group have more than a bachelor s degree, 20.6 per cent of South Asians (of which 23.5 percent for Hindus), 19 per cent of Arabs, and 14.8 per cent of Chinese. These relatively high levels of educational achievement might reflect the high value traditionally put on education by these, particularly Asian, cultures. On the other hand, there are some visible minority groups of 2 nd generation immigrants that are getting significantly less education than non-visible minority and non-immigrants groups. Only 25.6 per cent of Latin Americans, 35.1 per cent of Blacks earned university certificates or degrees. And only 6.2 per cent of Latin Americans, 7.6 per cent of Filipinos, and 8.6 per cent of Blacks had university certificates, diplomas or degrees above the bachelor s. But still even these groups had higher educational attainment than non-immigrants (showed by the height of the bar above the red line in Chart 2). 3

Average Employment Earnings While 2 nd generation visible minority immigrants obtained more education than 2 nd generation non-visible minority immigrants and non-immigrants, their performance as a group did not fully measure up in the labour market. In the 25 to 44 age group, 2 nd generation visible minority immigrants on average earned $42,206, which while higher than the $40,431 earned non-immigrants, was substantially less than the $49,202 earned by 2 nd generation non-visible minority immigrants (Table 2A and Chart 3). Not surprisingly, 2 nd generation visible minority immigrant women earned substantially less than men (Table 2B and 2C). The labour market performance varies significantly among visible minority groups. 2 nd generation Chinese immigrants in the 25-to-44 age group actually earned $47,879, which was substantially more than non-immigrants who only earned $40,431, but less than 2 nd generation non-visible minority immigrants who earned $49,202. Because of the large number of Chinese included as 2 nd generation visible minority immigrants, this buoyed the overall average earnings for 2 nd generation visible minority immigrants. Other visible minority groups in the 25-to-44 age group that outperformed non-immigrants, but not 2 nd generation non-visible minority immigrants, were South Asians ($46,662) (of which Hindu $47,416), and Japanese ($47,419. On the other hand, Blacks ($31,468) and Latin Americans ($34,322) experienced the largest earnings shortfalls in average employment earnings relative to non-immigrants. On average, 2 nd generation visible minority women earned 79 per cent of men (Table 2B and 2C). This was a much higher proportion than for both 2 nd generation non-visible minority immigrants (64 per cent) and non-immigrants (66 per cent). 4

But there were wide variations across visible minority groups, probably reflecting cultural differences. To cite the extremes, Black women earned almost as much as men and Arab women only earned 60 per cent of men, which was significantly less than both non-visible minority immigrants and non-immigrants. It is troubling that Black and Latin American 2 nd generation immigrants earn substantially less than non-immigrants and especially non-visible minority immigrants for almost any given educational level (Table 2A and Chart 3). Some will undoubtedly be inclined to attribute these differences in labour market performance to discrimination. But to make a convincing case, they will have to be able to explain why other 2 nd generation immigrant groups, particularly Asian, are able to overcome any obstacles they face and become so successful both in attaining an education and in the labour market. Another cause for concern is that the current labour market performance of 2 nd generation visible minority immigrants may not be a reliable indicator of the labour market performance of 2 nd generation visible minority immigrants in the future. The reason this might be the case is that many in the current group of 2 nd generation visible minority immigrants of prime labour force age are the children of cohorts of visible minority immigrants who came to Canada in much smaller numbers than are being admitted currently before immigration was liberalized. These cohorts of visible minority immigrants were able to perform much better in the labour market than the post-1990 cohorts for whom the earnings deterioration was observed to be most marked and consequently they would be better positioned to assist their offspring in attaining education and getting established in the labour market. 5

Conclusions The results from this study are broadly in line with its predecessor (Grady, 2011), but offer more encouragement for an improved performance of 2 nd generation visible minority immigrants. The good news from the 2011 National Household Survey is that the Canadian-born children of some visible minority immigrants, particularly Koreans, Chinese and South Asians are getting more education than non-visible minority 2 nd generation immigrants and non-immigrants. It also offers encouraging evidence that the children of the visible minority, particularly Asian immigrants who are now performing so poorly in Canada s labour market will be able to catch up or surpass the earnings of non-immigrant groups, even if they will have a hard time keeping up with their non-visible minority counterparts. However, it provides no grounds for complacency that the children of the recent non-asian visible minority immigrants, particularly Black and Latin American, who are performing so poorly in Canada s labour market, will be able to catch up with non-immigrant groups in their earnings, or especially do as well as the descendants of non-visible minority immigrants who are still continuing to out-earn nonimmigrant groups. 6

References Grady, Patrick (2010) "An Analysis of the Underlying Causes of the Poor Performance of Recent Immigrants Using the 2006 Census PUMF and Some Observations on Their Implications for Immigration Policy." Global Economics Working Paper 2010-2. <www.globaleconomics.ca/empin_recent_immigrants.pdf> Grady, Patrick (2011) " How are the Children of Visible Minority Immigrants Doing in the Canadian Labour Market?" Global Economics Working Paper 2011-1. <www.global-economics.ca/immigration_2nd_generation.pdf> Grady, Patrick (2015) " Time to Face the Fact that the National Household Survey Is Just the Compulsory Long-Form Census Made Voluntary " Global Economics Working Paper 2015-1. <www.global-economics.ca/nhs_comments.pdf> Grady, Patrick and Herbert Grubel (2015) Immigration and the Welfare State Revisited: Fiscal Transfers to Immigrants in Canada in 2014. November. <www.global-economics.ca/immigration-and-the-welfare-state-revisited.pdf> Picot, Garnett (2008). Immigrant Economic and Social Outcomes in Canada: Research and Data Development at Statistics Canada. Catalogue No. 11F0019M No. 319, Statistics Canada. Picot, Garnett, and Arthur Sweetman (2005). The Deteriorating Economic Welfare of Immigrants and Possible Causes: Update 2005. Catalogue No. 11F0019MIE2005262. Statistics Canada. Picot, Garnett, and Feng Hou (2008). Immigrant Characteristics, the IT Bust, and Their Effect on Entry Earnings of Immigrants. Catalogue No. 11F0019MWE2008315. Statistics Canada. <http://www.statcan.gc.ca/pub/11f0019m/11f0019m2008315-eng.pdf> Statistics Canada (2014a). 2011 National Household Survey Public Use Microdata File(PUMF) Individuals File. Catalogue no. 95M00081. Statistics Canada (2014b). NHS User Guide, Catalogue no. 99-001-X2011001. Statistics Canada (2014c). Income Reference Guide: National Household Survey, 2011, Catalogue no. 99-014-X2011006. Acknowledgments I wish to thank Constantine Kapsalis and Herbert Grubel for their comments and suggestions on an earlier draft of this paper. 7

Table 1A: Numbers of Individuals of Both Genders 25-44 Years of Age Reporting Average Employment Income in 2010 or Diploma less than or Degree above Groups No Degree Total Number Shares (%) Total 2nd Generation 60.5 5.0 22.9 11.6 35,556 Vis Min 2nd Gen 46.6 6.7 32.5 14.2 8,084 Not Vis Min 2nd Gen 64.6 4.5 20.1 10.7 27,285 Total Non-Immigrant 74.8 3.9 14.6 6.7 292,974 Breakdown by Visible Minority Group South Asian 1 39.1 7.4 33.0 20.6 2,043 Chinese 34.7 5.1 45.3 14.8 2,271 Black 64.9 7.8 18.7 8.6 1,546 Filipino 55.9 7.4 29.1 7.6 594 Latin American 74.4 3.8 15.6 6.2 289 Arab 46.0 9.0 26.0 19.0 289 Southeast Asian 2 53.9 7.2 25.7 13.2 304 West Asian 3 38.7 6.5 22.6 32.3 31 Breakdown by Religion Korean 31.9 5.4 40.4 22.3 166 Japanese 46.5 5.1 30.3 18.2 99 Muslim 44.3 7.4 28.0 20.2 672 Hindu 34.3 7.7 34.5 23.5 469 Sikh 46.3 8.5 29.4 15.8 704 Source: Statistics Canada (2014a), Tabulations from 2011 National Household Survey PUMF. Notes: 1. South Asian includes, for example, 'East Indian', 'Pakistani', 'Sri Lankan', etc. 2. Southeast Asian includes, for example, 'Vietnamese', 'Cambodian', 'Malaysian', 'Laotian', etc. 3. West Asian includes, for example, 'Iranian', 'Afghan', etc. 8

Table 1B: Numbers of Men 25-44 Years of Age Reporting Average Employment Income in 2010 or Diploma less than or Degree above Groups No Degree Total Number Shares (%) Total 2nd Generation 63.9 4.8 20.8 10.5 17,754 Vis Min 2nd Gen 52.0 6.8 29.0 12.3 4,110 Not Vis Min 2nd Gen 67.6 4.2 18.3 9.9 13,552 Total Non-Immigrant 77.7 3.2 12.9 6.2 143,941 Breakdown by Visible Minority Group South Asian 44.3 6.9 29.7 19.1 1,014 Chinese 38.6 6.0 41.9 13.4 1,191 Black 74.3 6.7 13.5 5.5 764 Filipino 61.3 8.0 26.2 4.5 313 Latin American 79.5 2.6 14.6 3.3 151 Arab 43.8 11.3 26.9 18.1 160 Southeast Asian 60.1 6.5 22.0 11.3 168 West Asian 53.8 0.0 23.1 23.1 13 Korean 40.5 8.9 30.4 20.3 79 Japanese 50.0 5.2 27.6 17.2 58 Breakdown by Religion Muslim 45.5 8.7 24.8 21.0 343 Hindu 41.8 7.1 25.8 25.3 225 Sikh 54.4 7.6 24.9 13.0 353 Source: Statistics Canada (2014a), Tabulations from 2011 National Household Survey PUMF. 9

Table 1C: Numbers of Women 25-44 Years of Age Reporting Average Employment Income in 2010 or Diploma less than or Degree above Total Groups No Degree Number Shares (%) Total 2nd Generation 57.0 5.2 25.1 12.6 17,802 Vis Min 2nd Gen 41.0 6.6 36.1 16.3 3,974 Not Vis Min 2nd Gen 61.7 4.8 21.9 11.6 13,733 Total Non-Immigrant 72.0 4.6 16.2 7.2 149,033 Breakdown by Visible Minority Group South Asian 33.9 7.9 36.2 22.0 1,029 Chinese 30.5 4.1 49.1 16.4 1,080 Black 55.6 9.0 23.8 11.6 782 Filipino 49.8 6.8 32.4 11.0 281 Latin American 68.8 5.1 16.7 9.4 138 Arab 48.8 6.2 24.8 20.2 129 Southeast Asian 46.3 8.1 30.1 15.4 136 West Asian 27.8 11.1 22.2 38.9 18 Korean 24.1 2.3 49.4 24.1 87 Japanese 41.5 4.9 34.1 19.5 41 Breakdown by Religion Muslim 43.2 6.1 31.3 19.5 329 Hindu 27.5 8.2 42.6 21.7 244 Sikh 38.2 9.4 33.9 18.5 351 Source: Statistics Canada (2014a), Tabulations from 2011 National Household Survey PUMF. 10

Table 2A: Average Employment Income of Both Genders in 2010 ($) or Diploma less than or Degree above Groups No Degree Total Total 2nd Generation 36,064 43,877 57,685 71,176 46,694 Vis Min 2nd Gen 30,412 38,575 49,635 64,349 42,206 Not Vis Min 2nd Gen 38,452 48,500 63,822 76,188 49,202 Total Non-Imm 33,717 44,868 55,703 65,865 40,431 Breakdown by Visible Minority Group South Asian 32,256 43,008 50,176 69,182 46,662 Chinese 33,618 41,149 52,167 65,447 47,879 Black 25,470 34,143 41,263 52,910 31,468 Filipino 32,446 36,341 48,447 57,812 39,352 Latin American 29,788 33,091 54,652 37,389 34,322 Arab 35,459 26,333 47,406 64,416 43,491 Southeast Asian 23,783 42,190 46,513 82,688 38,696 West Asian 55,250 4,000 45,143 45,889 45,346 Korean 37,212 58,625 42,970 54,223 44,403 Japanese 36,828 43,000 49,333 66,929 47,419 Breakdown by Religion Muslim 29,030 24,458 51,208 56,185 40,634 Hindu 29,228 46,029 44,918 77,496 47,196 Sikh 36,339 46,052 46,725 57,074 43,562 Source: Statistics Canada (2014a), Tabulations from 2011 National Household Survey PUMF. 11

Table 2B: Average Employment Income Men in 2010 ($) or Diploma less than or Degree above Groups No Degree Total Total 2nd Generation 42,815 52,433 71,007 93,029 55,342 Vis Min 2nd Gen 34,240 43,004 56,970 80,287 47,149 Not Vis Min 2nd Gen 46,585 61,387 82,016 102,381 59,908 Total Non-Immigrant 41,913 56,245 70,126 81,569 48,832 Breakdown by Visible Minority Group South Asian 37,234 52,394 58,493 91,312 55,078 Chinese 35,825 42,295 57,144 76,720 51,215 Black 28,244 38,674 43,742 59,868 32,642 Filipino 35,286 32,880 57,160 66,357 42,233 Latin American 34,875 60,000 64,911 46,400 40,602 Arab 49,605 23,188 58,789 68,324 52,712 Southeast Asian 25,379 47,600 50,486 105,606 41,197 West Asian 59,600 NA 71,333 36,333 56,455 Korean 34,281 67,000 48,750 61,125 47,013 Japanese 39,950 22,500 63,385 86,000 54,791 Breakdown by Religion Muslim 39,987 23,321 61,688 64,800 49,430 Hindu 33,626 50,333 51,836 102,926 56,856 Sikh 40,189 60,577 54,221 73,816 49,662 Source: Statistics Canada (2014a), Tabulations from 2011 National Household Survey PUMF. 12

Table 2C: Average Employment Income of Women in 2010 ($) or Diploma less than or Degree above Groups No Degree Total Total 2nd Generation 27,810 35,742 47,410 54,426 37,998 Vis Min 2nd Gen 25,336 34,001 43,657 52,316 37,147 Not Vis Min 2nd Gen 28,819 37,214 50,363 55,867 38,533 Total Non-Immigrant 24,397 37,527 45,955 55,290 32,217 Breakdown by Visible Minority Group South Asian 25,967 35,167 43,513 50,488 38,516 Chinese 30,293 39,030 47,530 56,017 44,208 Black 21,809 30,985 39,989 49,799 30,335 Filipino 28,500 40,895 40,517 53,953 36,115 Latin American 23,458 17,714 43,905 33,923 27,468 Arab 19,255 32,625 30,769 60,038 31,763 Southeast Asian 21,123 37,273 42,927 62,182 35,590 West Asian 48,000 4,000 25,500 50,667 37,200 Korean 41,679 NA 39,744 48,965 42,006 Japanese 29,889 63,500 36,286 41,500 37,194 Breakdown by Religion Muslim 17,242 26,050 42,824 46,157 31,613 Hindu 23,254 42,800 41,260 51,585 38,685 Sikh 30,672 34,250 41,103 45,381 37,372 Source: Statistics Canada (2014a), Tabulations from 2011 National Household Survey PUMF. 13